News

4/28/2013 - H&R Block claims don't add up

Much has been made in the pages of this newspaper, and by some city residents, of the H&R Block trend story targeting the "10 Most Taxed Cities in America." It's the unfortunate fact of the digital world we live in that these "misleading" trend stories catch the eye of the reader and the pundit without any proper research or follow-up.

Simply put, the story that H&R Block featured on its blog, and which was picked up by many news outlets, is misleading and inaccurate in its portrayal of Bridgeport as the most highly taxed city in the United States.

I don't dispute that our residents pay a lot of taxes -- the state of Connecticut bases its revenues on an overreliance on property taxes, making it one of the more highly taxed states in the U.S. For cities like Bridgeport, which is one of the smallest municipalities in the country and the hub of nonprofit services such as hospitals, colleges, courts and jails, it means that we depend on state reimbursements to make up for lost revenues.

That said, to list Bridgeport as the most highly taxed city in the United States is simply misleading.

The H&R Block story is based on a study prepared by a staffer who works for the District of Columbia to show how Washington, D.C.'s effective tax rate measures up favorably against other cities. However, this study relies on flawed information:

H&R Block's False Claims: This study is based on a hypothetical family of three making $50,000 owning a home valued at $369,609

Fact: This study rests on an income-to-home value that one would be hard-pressed to find in the city of Bridgeport. Median income of a Bridgeport resident is $38,000. The average home is valued at $170,000.

This study takes into account more than property and motor vehicle taxes. It also includes gasoline, sales taxes, motor vehicle registration fees and state income tax -- items over which the city has no direct control.

H&R Block is not even close to accurate in any of its research or assumptions. Bridgeport is not even the most taxed city in our state. Hartford, East Hartford, New Haven, Waterbury and Manchester all have higher mill rates than Bridgeport. According to the Connecticut Economic Resource Center (CERC), Bridgeport's per-capita tax is 27 percent less than the state average.

It's apparent that the story merely serves as a foil to publicize the company's tax preparation services, as if having your taxes done by H&R Block will somehow help lower your tax burden.

We know our residents are of modest means and work hard to afford what they have here in the city of Bridgeport. During my tenure, we have worked very diligently to reduce our expenditures and control all the costs we are able to, especially during this very challenging budget cycle.

We have made great progress in the city during the past five years -- restoring credibility and financial stability to city government and expanding economic development. We now face formidable challenges posed by a potential loss of $11 million in state revenue.

Rather than focusing on the flawed national "trend" stories that are misleading in order to gain attention, I urge my fellow residents to unite in contacting their state legislators to demand they find a better way to cut the state's budget, not add another more unrealistic burden to our taxpayers. It's my hope that H&R Block, and the Connecticut Post and other media outlets, will still stop using this misleading information, as attractive or sensational as it may be, to further its own goals at the expense of the cities it misrepresents.